I'm finding this all fascinating. Do you know what the m2 rate is here? There isn't one. NOBODY tiles here on a m2 rate. It is hourly, plus materials (which are NOT at trade prices).
Want to know what the hourly rate costs? 500kr (£46.95 at the current exchange rate). It literally sounds to me, based on some of the prices I've seen in this thread, and others, that people are working in the U.K. on DAY RATES of not much more than that. Are we allowed to swear in The Tiler's Arms?
When I tell you this next bit, you will probably all start swearing....
Since 2008, when the financial crisis really took hold, the Swedish govt decided to safeguard the building industry by introducing a scheme whereby private home owners could get a 50% reduction in the labour costs for any work they have done on their property, up to a maximum of £5,000 per person, per year, but only if they used a reputable, registered company (includes sole traders as well as Ltd companies).
So a couple living together could get up to £10,000 reduction on labour costs, per year.
If they had an extension built for example and the labour cost was £20k + VAT, they would only pay £10k + VAT. The builder fills out some forms and submits it to the govt. who them pay him the other £10k.
I know what you're thinking, why on earth would they do that? Well, we have to charge VAT on ALL building work, doesn't matter what your turnover is. And VAT here is 25%. Secondly, if you are not a Ltd company you pay around 45% total tax on profit (Ltd companies pay 26%, BUT, you have to pay yourself as an employee, and all the associated social security taxes that entails, so overall it is about the same).
Here are the workings of the scheme. Let's say you do £10,000 + VAT worth of labour for a homeowner.
Customer pays £5,000 + VAT (£1,250) = £6,250.
Govt pays you £5,000 (50% of the total labour cost excluding VAT).
Govt receives tax from you @ 45% of £10,000 = £4,500.
Total money paid out by govt = £5,000
Total tax rec'd by govt = £5,750
Net cost to taxpayer = Nothing. It actually makes a profit for the taxpayer.
And what does it mean to the industry? Well, homeowners don't know when the scheme might be ended, and so are all desperate not to lose out, and despite the financial climate, people are still renovating their houses and flats.
Cowboys, typically (or stereotypically) immigrant workers, often uninsured, technically unemployed and receiving benefits, doing shoddy work with no guarantee for cash in hand don't get a look in. Who in their right mind is going to pay a cowboy when they can get a professional for the same price?
I feel for you guys over there. From what I'm reading your govt doesn't care less about it's building industry workers, does nothing to assist, and in fact is actively encouraging a race to the bottom by introducing all these eatern European workers who drive prices down.
p.s. I know 45% tax sounds outrageously high, but never judge a book by it's cover. Every tax payer, even employees on PAYE, can offset ALL loan interest against their income tax liability. If you pay a mortgage, or a car loan, or credit card interest, or any other kind of loan, then 100% of the interest you have paid in that tax year is deducted from your taxable income. If you are an employee and have to commute to work then you can claim £0.30 per mile off your tax bill after the first £900. The Swedish system is interesting in that it rewards people who spend and take on loans. If you live in a rented house/flat, drive an old car, pay your credit card bill on time, and have no loans then you pay more tax than someone who has a mortgage, a car loan, and other loans. How can that be fair? Because believe it or not, the people spending, taking on loans and buying things are the people who are helping keep the economy going. People who scrimp and save and don't spend cause it to contract and stagnate. That's why I fear for the U.K. economy. If people are expected to work for a hundred quid a day, maybe, then what good is that for them, or the govt, or the overall economy? How can they spend when they can barely afford to keep themselves alive?
